Orioles could use a lesson in sports marketing

Nate McLouth (Brad White / Getty Images )

December 08, 2013|Peter Schmuck

On the same frenzied Friday that the Seattle Mariners reeled in free agent superstar Robinson Cano with a $240 million contract and several other teams made major free agent acquisitions, the Orioles signed an unheralded middle reliever, surrendered outfielder Nate McLouth and pitcher Scott Feldman without a fight, and began informing season-ticket holders that prices are going up.

Throw in the highly unpopular Jim Johnson deal earlier in the week, and it's clear that this offseason if off to a bang-up start.

The fact that the Washington Nationals signed McLouth and the lowly Houston Astros gave Feldman $30 million is not exactly a sign of the apocalypse, but in a sports world where appearances matter, the Orioles seem unwilling to make even a cursory attempt to compete for quality talent outside the organization.

Manager Buck Showalter pointed out in a Q&A with The Baltimore Sun this weekend that “there's a lot of offseason left,” but three years after he was promised he could have a “Let's go” moment, the Orioles suddenly appear to be going backward.

Of course, the modest signings of right-hander Ryan Webb and nontendered reserve outfielder Francisco Peguero this weekend and the decision not to aggressively attempt to retain two veteran free agents cannot be directly linked to the hike in season-ticket prices.

The decision to raise season-ticket prices by an average of about 5 percent and change the way single-game tickets are priced is made at a different organizational level, but the timing of all this is enough to make a marketing consultant jump off the Warehouse.

To be fair, that timing is coincidental, and the O's have not bumped up season-ticket rates for several years. The club's new “dynamic” pricing plan has been in the works for a while, and season ticket mailers — which went out on Friday — have to be delivered before the holidays.

The decision to jettison Johnson's salary obligation with a thin trade also was made in the face of a deadline for tendering contracts to arbitration-eligible players, though the Orioles could have waited and gambled that they could get more for him during spring training.

It's unfortunate that the franchise has found itself in a perfect storm of bad public relations, but it's not like the front office couldn't have seen it coming.

Orioles executive vice president Dan Duquette has spent the past month packing the roster with anonymous players and — as has become an Orioles custom — apparently waiting to see which veteran free agents nobody else wants.

Maybe Duquette and the Angelos family will have the last laugh and prove that the Orioles are way smarter than their well-heeled division rivals, but fans have every right to wonder what exactly is their plan to compete for the American League East title.

Owner Peter Angelos said Thursday that the team is doing the best it can in a market with limited revenue potential, but it gets harder and harder to make that case when other teams in similarly sized markets manage to spend significantly more money and don't appear close to filing for bankruptcy.

The irony of the “dynamic” pricing plan is that one of the teams the Orioles will leverage by increasing single-game ticket prices is the National League champion St. Louis Cardinals, who play in a very similar market and spend about $25 million more annually on player salaries.

The focus of the premium single-game pricing is always the New York Yankees and Boston Red Sox, but fans who wait to buy tickets to see the interleague games against the Nationals also will pay more, which has to be galling to a Washington franchise that already helps support the Orioles by paying more to field an attractive team while getting a much smaller fraction of the revenues from their jointly held regional television network.

The proof will be in the final payroll. Duquette has been saying for the past five days that the Johnson deal was simply an attempt to reallocate the club's resources to position it better to fill its offseason needs.

It's hard to say exactly what that means. The O's have been relieved of Brian Roberts' $10 million salary and just pared more than $10 million by shedding the 2013 salaries of Johnson, McLouth and Feldman. They will have to give big raises to arbitration-eligible Matt Wieters and Chris Davis but should be able to afford a quality left fielder or designated hitter, if they can locate one.

The Orioles don't broadcast their budget, so there's no way to know for sure how much revenue the franchise brings in and how much will be spent this year. Last year's payroll started out at $92 million and increased with several midseason acquisitions.

Based on the club's own good tidings about 2013 attendance, television ratings and merchandise sales, it would be fair for fans to expect some increase in spending, but based on the noise coming out of the Warehouse this winter, that might not be a fair assumption.

Sometimes, it seems like the front office is just tone deaf. Angelos, Duquette and whoever else might be calling shots in the organization need to remember one of the unwritten rules of sports marketing.

If you want people to drink the Kool-Aid, you have to put some sugar in it.

peter.schmuck@baltsun.com

Read more from columnist Peter Schmuck on his blog, “The Schmuck Stops Here” at baltimoresun.com/schmuckblog and listen when he co-hosts “The Week in Review” on Friday mornings at 9 on WBAL (1090 AM) and at wbal.com.